Company Accounts

Share Capital

Easy

Which of the following is not a feature of a Company:

A company is formed according to the provisions of Law enforced from time to time.

A company has a separate legal entity which is distinct and separate from its members.

The liability of the members of the company is limited to the extent of unpaid amount of the shares held by them.

The company being an artificial person, can sign its name by itself.

✅ Correct Option: 4

A company is an artificial juridical person created by law. Let's examine each statement:

Option 1 states that a company is formed according to law - this is correct. Companies are incorporated under the Companies Act and must follow all legal provisions.

Option 2 mentions separate legal entity - this is correct. A company has its own identity distinct from its members. It can own property, enter contracts, and sue or be sued in its own name.

Option 3 discusses limited liability - this is correct. In a company limited by shares, members' liability is restricted to the unpaid amount on their shares.

Option 4 claims a company can sign its name by itself - this is incorrect.

A company, being an artificial person, has no physical existence. It cannot perform physical acts like signing documents on its own. It must act through:

Directors
Authorized signatories
Agents appointed for specific purposes
Common seal (where applicable)

The company's contracts and documents are signed by natural persons (like directors or managers) who are authorized to act on behalf of the company.

Since Option 4 incorrectly suggests that a company can physically sign by itself, it is not a feature of a company.

2022: 20 July Shift 1

Identify the statement that is/are not true from the following.

(a) Shares can be forfeited for non payment of call money.

(b) The profit on forfieted shares is transferred to capital reserve.

(d) Application money should be at least 10% of the face value of the share.

Choose the correct answer from the options given below :

2025: 13 May Shift 1

Which of the following statements are correct?

(A) A company is an artificial person.

(B) Company's shares are generally transferable.

(D) The part of capital which is called up only on winding up is called reserve capital.

Choose the correct answer from the options given below:

2026: 29 May Shift 2

Nominal share capital is :

2026: 12 May Shift 1

A company forfeits 200 shares of Rs. 10 each on which Rs. 600 had been received. It can allow a maximum discount of Rs. 600 on their reissue. Assuming that the company reissues these shares for Rs. 1,800 as fully paid up. What will be the journal entry for the treatment of remaining forfeited amount after adjustment of discount ?

Date	Particulars	L.F.	Dr. Amount	Cr. Amount
	Share Forfeiture A/c Dr.		400
	To Capital Reserve A/c			400

Date	Particulars	L.F.	Dr. Amount	Cr. Amount
	Capital Reserve A/c Dr.		400
	To Share Forfeiture A/c			400

Date	Particulars	L.F.	Dr. Amount	Cr. Amount
	Share Forfeiture A/c Dr.		200
	To Capital Reserve A/c			200

Date	Particulars	L.F.	Dr. Amount	Cr. Amount
	Capital Reserve A/c Dr.		200
	To Share Forfeiture A/c			200

2025: 22 May Shift 2

There must be an interval of how many months between the making of two calls unless otherwise provided by the articles of association of the company.

2025: 14 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Authorised Capital	(i) It is that part of the subscribed capital which has been called up on the shares.
(B) Issued Capital	(ii) It is that part of the issued capital which has been actually subscribed by the public.
(C) Subscribed Capital	(III) It is that part of the authorised capital which is actually issued to the public for subscription.
(D) Called up Capital	(IV) The amount of share capital which a company is authorised to issue by its Memorandum of Association

Choose the correct answer from the options given below:

Which of the following is not a feature of a Company:

Solution

Related questions:

Keyboard Shortcuts

CUET Accountancy Past Year Questions (Topic-Wise)